Tax on nsc ( post office scheme)

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Querist : Anonymous

Querist : Anonymous (Querist)

24 May 2012 My query is how much amount is taxable on the maturity of NSC after 15 years ( amount reinvested after every 5 years). The amount of Rs-100000 reinvested after every 5 years becomes Rs-353610 after 15 years. So from this example how much amount is taxable after 15 years.

Thanks in advance

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

24 May 2012 NSC interest is calculated on the basis of completed years.
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Such yearly interest is taxable.
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However, if the assessee is follows cash system of accounting and does not account for interest, he loses the benefit U/s 80C also which remains available to him during the completed year 1 to completed year 5.
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In this case, assuming that you have purchased NSC of Rs. 221000/- and after 6 years it has become 353000/-. So taxable amount may be taken as 132000/-.
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In my view, as at the time of renewal you have been allotted New NSC Certificates. it can not be termed as renewal. So the Income
of Rs. 221000-100000=121000 can not be assessed at the time of Final Maturity even though such income has not been disclosed
earlier.
.

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Querist : Anonymous

Querist : Anonymous (Querist)

10 December 2012 If i want to file a return considering the interest part ,will the post office provide me some document regarding interest part or i will have to calculate manually and then file the return. And one more thing if i dont take the interest part yearly in the return then can i take the whole interest after 5 years and file the return accordingly.

Thanks in advance

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